Waiting for the G20 to….?

Finance ministers and central bankers from the G20 meet this weekend in the English countryside to discuss the world’s financial and economic crisis. With this in mind, MacroScope asked a number of economists what they want to see from the meeting and the G20 summit to follow later and what they expect to see.

The answer, in short, appears to be that much is needed but not much expected.

Paul Mortimer-Lee, head of market economics, BNP Paribas:

“There will be progress on agreeing that regulation needs to be more effective and more effectively co-ordinated on a global scale but I am unconvinced we are going to go a long way further. Some populist posturing on bank bonuses etc should be expected. The less is achieved in other areas the more this will get played up. On bank recapitalisation, they will all agree strong capital is a good thing, but in no way do I expect a concerted plan — it’s driven by events and the exigencies of the local banking system.

“I would like to see progress on the international financial architecture/the IMF and its resources. Maybe we’ll get some new facility and some agreement on more new cash … but a radical overhaul requires the power structure to be rejigged — more power to the (emerging economies) and less to Europe. This is not something European politicians will want to be high profile when it comes out.”

Sarah Hewin, senior economist, Standard Chartered:

“The economic data continue to worsen and markets remain in a state of fear. So the best outcome from the meeting would be a co-ordinated response to frozen credit markets and collapsing global economic activity.

“A wish-list would include announcements on: fixing banking systems, including cleaning up banks’ balance sheets by dealing with toxic assets; more and co-ordinated fiscal stimulus and wider adoption of quantitative easing; expanding the size of the IMF to enable it to support vulnerable countries; and commitments against protectionism.

“But the experience of previous summits is not encouraging – apart from increasing IMF resources and making the right noises on protectionism, we are likely to see few real progressive steps taken.”

Gabriel Stein, director, Lombard Street Research:

“The G20 meeting, like almost all summits, is a waste of time. Most of the work will have been done beforehand and the actual meeting could just as well be delegated to functionaries. Its main purpose is political.

“It will issue a bland communiqué telling us that they agree on the need for further reforms and oversight of the world financial system, but that while co-ordination is useful, the actual details are better left to each country/region with its specific issues and problems. It will also warn against protectionism.”

Alessandro Bee, economist, Bank Sarasin:

“I would like them to come up with a plan to solve the credit crisis, a coordinated plan. Also apowerful plan with some clear-cut strategies. What we see now is more like a series of individual plans that sometmes materialse and sometimes not.

“I would expect some annoucements rather than real decisions.*

So that’s them. What about you? What do you want to see and what do you expect to see?

These clowns could have agreed an agenda over the phone, turned up and executed it.

Instead they will just turn up, scoff the food, call for everyone to work together whilst clearly not working together at all, go to sleep for the duration of the meeting and then go back to where they came from. All courtesy of the taxpayer.

1. A new, international, Glass-Steagall law.
2. A ban on speculative lending by banks.
3. Correcting as much conflict of interest as possible.

More specific policies may be taken into consideration by G20:

a. Delisting of companies with vested interest in the markets (i.e. investment banks and stock exchanges).
b. Investigating cases of extreme volatility (as was he case in the past).
c. Expanding the role of central banks to assist broader financial regulation.
d. Bets, disguised as financial products, must be treated as…bets.

Should we even mourn that no consensus will be reached? After all, we’re in a position where nobody knows what will work. So if, come autumn, Sarko’s allegedly more effective regulation turns out to be producing results, Obama will introduce “regulation with an American face”. If, on the other hand, Obama’s stimulus appears to be working, then Sarko will introduce “stimulus spending with a French face”. But if they all agreed to try just one thing, then the odds of stumbling on the magic solution would fall drastically.

In short, while on the way into the recession, “populist” means all the bad old stuff that we know won’t work, on the way out, it will come to mean “what’s working over there”, wherever “there” happens to be.

What do I want to see? America having Congress COIN Americas money using only Gold and Silver as legal tender and banks keeping over 90% of their reserves on hand instead of 5-10%. (just to name two). What do I expect to see? Everything unconstitutional under the sun.

The British should take the initiative to start a TWENTYFIRST CENTURY INTERNATIONAL RECOVERY BANK instead of funding IMF as has been decided because there are many reports including those from THE WORLD BAK STAFF during the last 40 years giving proof that the IMF policy of stings attached have DESTOYED some AFRICAN countries EXPORTS and subsequent economic disaster; I think one of the reports was by a WORLD BANK ECONOMIST Ms.Leela —second name I do not recall now. The new Bank will be operated by Senior officials from manger Banks in the WORLD and they will supervise how each country uses the funds.Please take up this suggestion with appropriate authorities in the member countries of the IMF and THE World Bank.